Influencer marketing is a popular and powerful tool and opportunity for businesses, both large and small, to showcase their services and products to a specific, engaged audience. While businesses are investing their advertising and marketing dollars, Influencers are growing into full-fledged businesses earning upwards of six-figures yearly.
Not all influencers are at that level, but most are earning income through product promotions, partnerships, and brand deals.
In 2024, everyone is jumping at the opportunity of becoming an influencer – but few are prepared for the backend work and upkeep that goes along with it. To make your accounting easier in 2024, ModVentures is sharing our top 10 accounting tips for 2024:
Influencers are self-employed and work as independent contractors. As you are self-employed, you can choose to remain as a sole proprietorship or choose to file as an LLC. While a sole proprietorship is “easier,” an LLC provides protection for your personal assets.
Influencers are responsible for reporting their income and turning in their 1099 forms during tax season.
As an independent contractor, influencers are responsible for their own earned income tax and self-employment tax. If you’re doing your taxes yourself, set aside money to cover taxes as you earn it. If you’re working with a company, they’ll likely set-up quarterly tax payments.
Travel expenses, cameras, laptops, and marketing campaigns are just a few of the deductions you might be eligible for. Get familiar with the tax deductions available for work/influencer expenses or hire an accounting service to do it for you!
Quickbooks is a great, low-cost tool for influencers and small businesses to track income and expenses. Quickbooks connects to your accounts to accurately track your information throughout the year instead of worrying about it at once.
Create a separate account for your influencer earnings and expenses and pay yourself out to your personal bank account when needed. Keeping everything separate allows you to see where your money is going and keep it organized for tax time.
Whether you are remaining as a sole proprietor or you are deciding to form and file as an LLC, you should register your business (your brand as an influencer) with the state you reside in.
Accounting services are not all or nothing, if you are an influencer struggling to understand or set-up your accounting you can consult with an accounting firm. ModVentures offers advisory services for these exact reasons – and asking for help ahead of time will save money down the road.
Just like most small businesses, we recommend that influencers pay quarterly estimated taxes. This allows you to ensure that your taxes are paid prior to tax season, ensuring you won’t have any surprise tax fees.
Make room in your start-up and maintenance budget when setting up and managing your backend and accounting. Whether you are doing it yourself or investing in an accounting service, you will need to ensure you have enough to cover recurring (or upfront) expenses.
Rather than investing in accounting services or advisory services (or attempting to figure it out on your own), invest in an accounting course designed specifically for influencers. We highly recommend our Business Savvy Influencer Course!